Opinion
No. CV 09-5028505 S
March 25, 2011
MEMORANDUM OF DECISION RE MOTION FOR SUMMARY JUDGMENT (Motion #103.00)
FACTS
The plaintiff, Arthur Iacurci, commenced this action for professional malpractice and negligence by service of process on the defendants, Larry Sax and Cohen, Burger, Schwartz, Sax, LLC, on November 10, 2009. On December 31, 2009, the defendants filed an answer with one special defense, which alleges that the statute of limitations General Statutes § 52-577, bars the plaintiff's claims. The plaintiff, on January 27, 2010, responded to the defendants' special defense, pleading a general denial that the statute of limitations bars his claims. On July 23, 2010, the plaintiff filed a request to amend his reply pleading with an amended reply, pleading that the tolling provisions of General Statutes § 52-595 (fraudulent concealment) apply to his claims.
At short calendar on January 3, 2011, the defendants stated that they did not object to the amended reply. The court then ruled that pursuant to Practice Book § 10-60 the "Amended Reply" is deemed consented to and is the operative pleading.
The facts the plaintiff alleges in his complaint are as follows. The defendant Sax is a certified public accountant providing services on behalf of the defendant, Cohen, Burger, Schwartz Sax, LLC. For tax years 1999 through 2005, the defendants prepared federal and state income tax returns for the plaintiff and Barbara Iacurci. The plaintiff has been an investor in real estate over the past fifteen years. For tax years 1999 through 2002, the defendants prepared returns that portrayed the plaintiff as a "real estate investor." For tax years 2003 through 2005 the defendants prepared returns that portrayed the plaintiff as "an individual engaged in the business of real estate." This change in his status resulted in increasing his tax liability. The plaintiff "disassociated professionally" from the defendants in 2007, and hired another firm to prepare his tax returns. The plaintiff alleges that the new firm noticed the change in the plaintiff's tax status from 2003 onward and filed amended tax returns for tax years 2003 through 2005 in February of 2007.
Barbara Iacurci is not a party to this action.
On June 11, 2010, the defendants filed a motion for summary judgment on the ground that the plaintiff's claims are time barred under § 52-577, the three-year statute of limitations governing tort claims. The defendants submitted a memorandum of law in support of the motion, a copy of Sax's affidavit and several exhibits. On July 28, 2010, the plaintiff filed an objection on the ground that there exist genuine issues of material fact as to whether § 52-595 applies to toll the running of § 52-577. In support of his objection, the plaintiff submitted a memorandum in opposition to the motion, and a copy of his affidavit as well as that of Robert Walsh, a financial planner licensed in the state of Connecticut. The defendants filed a reply memorandum on October 1, 2010, and the plaintiff filed a sur-reply on October 8, 2010. On January 3, 2011, the matter was heard at short calendar and the plaintiff filed a supplemental memorandum in opposition to the defendants' motion for summary judgment on that date.
DISCUSSION
"Practice Book § 17-49 provides that summary judgment shall be rendered forthwith if the pleadings, affidavits and any other proof submitted show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law. In deciding a motion for summary judgment, the trial court must view the evidence in the light most favorable to the nonmoving party." (Internal quotation marks omitted.) Sherman v. Ronco, 294 Conn. 548, 553-54, 985 A.2d 1042 (2010).
"In seeking summary judgment, it is the movant who has the burden of showing the nonexistence of any issue of fact. The courts are in entire agreement that the moving party for summary judgment has the burden of showing the absence of any genuine issue as to all the material facts, which, under applicable principles of substantive law, entitle him to a judgment as a matter of law. The courts hold the movant to a strict standard. To satisfy his burden the movant must make a showing that it is quite clear what the truth is, and that excludes any real doubt as to the existence of any genuine issue of material fact . . . As the burden of proof is on the movant, the evidence must be viewed in the light most favorable to the opponent . . . When documents submitted in support of a motion for summary judgment fail to establish that there is no genuine issue of material fact, the nonmoving party has no obligation to submit documents establishing the existence of such an issue . . . Once the moving party has met its burden, however, the opposing party must present evidence that demonstrates the existence of some disputed factual issue . . . It is not enough, however, for the opposing party merely to assert the existence of such a disputed issue. Mere assertions of fact . . . are insufficient to establish the existence of a material fact and, therefore, cannot refute evidence properly presented to the court under Practice Book § [17-45]." (Internal quotation marks omitted.) Ramirez v. Health Net of the Northeast, Inc., 285 Conn. 1, 10-11, 938 A.2d 576 (2008).
"Summary judgment may be granted where the claim is barred by the statute of limitations." Doty v. Mucci, 238 Conn. 800, 806, 679 A.2d 945 (1996). It is appropriate to grant summary judgment on statute of limitation grounds when the "material facts concerning the statute of limitations [are] not in dispute . . ." Burns v. Hartford Hospital, 192 Conn. 451, 452, 472 A.2d 1257 (1984). "[S]ummary judgment is proper where the affidavits do not set forth circumstances which would serve to avoid or impede the normal application of the particular limitations period." (Internal quotation marks omitted.) LaBow v. Rubin, 95 Conn.App. 454, 471, 897 A.2d 136, cert. denied, 280 Conn. 933, 909 A.2d 960 (2006).
I ADMISSIBILITY OF WALSH AFFIDAVIT
In support of his objection to the motion for summary judgment, the plaintiff offers an affidavit from Walsh, a disclosed expert witness. At the short calendar hearing, the defendants argued that portions of the Walsh affidavit were not admissible evidence. The defendants argued that paragraph three of the affidavit is hearsay, paragraph four is an inadmissible opinion, and paragraph five is an inadmissible opinion and a legal conclusion lacking proper foundation. The plaintiff did not offer any counter arguments supporting the admissibility of the affidavit during oral argument, or in his memorandum of law. The court, therefore, must examine the admissibility of these portions of the affidavit.
"The trial court is given broad latitude in ruling on the admissibility of evidence . . ." Pestey v. Cushman, 259 Conn. 345, 369, 788 A.2d 496 (2002). "Only evidence that would be admissible at trial may be used to support or oppose a motion for summary judgment, and the applicable provisions of our rules of practice contemplate that supporting [or opposing] documents . . . be made under oath or be otherwise reliable." (Internal quotation marks omitted.) Rockwell v. Quintner, 96 Conn.App. 221, 234 n. 10, 899 A.2d 738, cert. denied 280 Conn. 917, 908 A.2d 538 (2006). Practice Book § 17-46 provides, "Supporting and opposing affidavits shall be made on personal knowledge, shall set forth such facts as would be admissible in evidence, and shall show affirmatively that the affiant is competent to testify to the matters stated therein. Sworn or certified copies of all papers or parts thereof referred to in an affidavit shall be attached thereto." "The general standard for admissibility of expert testimony in Connecticut is simply that the expert must demonstrate a special skill or knowledge, beyond the ken of the average juror, that, as properly applied, would be helpful to the determination of an ultimate issue . . . Once the threshold question of usefulness to the jury has been satisfied, any questions regarding the expert's qualifications properly go to the weight, and not to the admissibility, of his testimony . . . For the purposes of an expert's opinion, the expert's personal knowledge of facts is comprised of those materials on the basis of which he properly may render his opinion . . . These materials include those on the basis of which the expert forms an opinion, and include . . . hearsay . . . Furthermore, an expert's opinion is, for purposes of § [17-46], a fact that would be admissible at trial, assuming that the expert is qualified to render such an opinion . . . Thus, an expert's opinion may be based on second hand sources, such as his training and experience, and information obtained from others." (Citations omitted; internal quotation marks omitted.) DiPietro v. Farmington Sports Arena, LLC, 123 Conn.App. 583, 613-14, 2 A.3d 963, cert. granted on other grounds, 299 Conn. 920, 10 A.3d 1053 (2010).
In his affidavit, Walsh sets forth his qualifications as a financial planner. He is currently licensed as such in Connecticut, he provides clients with assistance and advice on financial and tax matters, and he prepares approximately 1300 tax returns per year. In paragraph three, he attests to the following: He was hired by the plaintiff to prepare his 2006 tax returns and had the occasion to review the plaintiff's tax returns for the years 2003 through 2005, which had been prepared and filed by the defendants. He testifies that he observed errors made by the defendants in having filed a Schedule C and reporting therein that the plaintiff was engaged in the real estate business, rather than a Schedule D and reporting therein that the plaintiff was a real estate investor. Walsh opines that using the incorrect schedule resulted in a tax overpayment by the plaintiff of $177,000. In paragraph four, he attests that the plaintiff informed him that when the defendants filed the plaintiffs' tax returns for the years at issue, they failed to disclose to him their change in his status. Lastly, in paragraph five, Walsh indicates that in his professional opinion, the lengthy time period of the relationship between the parties and the nature and scope of the tax services rendered indicate that the defendants had a fiduciary duty and responsibility to disclose to the plaintiff any decision they made which materially changed his tax status for reporting his income, and that the failure of the defendants to have disclosed this information and having used Schedule D, rather than Schedule C, was a breach of that fiduciary duty.
Walsh's affidavit affirms that he has personal knowledge of the facts in the present case. Generally, Walsh provides information that would be useful to the jury. The details of tax preparation for real estate investors falls beyond the ken of the average juror and Walsh sets forth information on this subject from the perspective of a licensed financial planner who has worked as an advisor in financial and tax matters for twelve years. Additionally, for the purposes of providing an expert opinion, Walsh is permitted to rely on what is normally excluded as hearsay. The defendants' objections to the affidavit are overruled and the court will consider Walsh's affidavit in the context of this summary judgment.
II STATUTE OF LIMITATIONS AND FRAUDULENT CONCEALMENT
In their memorandum of law in support of the motion for summary judgment, the defendants argue that because there is no genuine issue of material fact as to the reclassification of the plaintiff's tax status, having occurred in early 2004, or at the latest in early 2007, his claims are barred under § 52-577, the three-year statute of limitations. The defendants also argue that the doctrine of continuous representation does not apply to toll the plaintiff's claims. Aside from offering as evidence an affidavit from Sax, the defendants also offer copies of letters of engagement between the plaintiff and the defendants, the return of service commencing this suit, and the electronic processing form for the plaintiff's 2003 tax returns.
The plaintiff objects to the motion for summary judgment on the ground that there is a genuine issue of material fact as to whether the tolling provision of § 52-595 applies. The plaintiff argues in his memorandum in opposition that § 52-577 does not govern here. He argues that § 52-595 applies to this case because it involves "1) professional negligence arising in the context of a fiduciary relationship; 2) nondisclosure by the defendants of their negligent acts when the defendants, under the circumstances, had a clear fiduciary duty to make such a disclosure; and 3) no knowledge or discovery of the defendants' undisclosed negligent acts by the plaintiff until late January 2007." In the defendants' reply memorandum, they respond that § 52-595 does not apply in this situation, and if it did, the plaintiff has not presented the facts necessary to trigger tolling under this statute.
General Statutes § 52-577 provides: "No action founded upon a tort shall be brought but within three years from the date of the act or omission complained of." "When conducting an analysis under § 52-577, the only facts material to the trial court's decision on a motion for summary judgment are the date of the wrongful conduct alleged in the complaint and the date the action was filed . . . The three year limitation period of § 52-577 begins with the date of the act or omission complained of, not the date when the plaintiff first discovers an injury." (Internal quotation marks omitted.) Farnsworth v. O'Doherty, 85 Conn.App. 145, 149-50, 856 A.2d 518 (2004).
Section 52-595 provides: "If any person, liable to an action by another, fraudulently conceals from him the existence of the cause of such action, such cause of action shall be deemed to accrue against such person so liable therefor at the time when the person entitled to sue thereon discovers its existence." To prove fraudulent concealment, a plaintiff must prove that the person concealing an action "(1) had actual awareness, rather than imputed knowledge, of the facts necessary to establish the plaintiff['s] cause of action; (2) intentionally concealed these facts from the [plaintiff]; and (3) concealed the facts for the purpose of obtaining delay on the plaintiff['s] part in filing a complaint on their cause of action." Falls Church Group, Ltd v. Tyler, Cooper, Alcorn, LLP, 281 Conn. 84, 105, 912 A.2d 1019 (2007). While there exists a "general principle that summary judgment procedure is particularly inappropriate where the inferences which the parties seek to have drawn deal with questions of motive, intent and subjective feelings and reactions . . . it remains, nevertheless, incumbent upon the party opposing summary judgment to establish a factual predicate from which it can be determined, as a matter of law, that a genuine issue of material fact exists." (Citations omitted; internal quotation marks omitted.) Connell v. Colwell, 214 Conn. 242, 251, 571 A.2d 116 (1990).
The harm alleged in the complaint by the plaintiff is that the defendants changed his tax status from a "real estate investor" to an "individual engaged in the business of real estate." The defendants have presented evidence through the affidavit of Sax that the last time they filed taxes for the plaintiff, and therefore, the latest possible date that the defendants could have incorrectly filed taxes for the plaintiff, is April 17, 2006. The plaintiff has not refuted this fact. The return of service filed with this court establishes that the action was commenced on November 10, 2009. The defendants have met their initial burden of proof that there exists no genuine issue of material fact as to whether the plaintiff's claims are time barred. The burden then shifts to the plaintiff to demonstrate that an issue of fact exists as to whether § 52-595, Connecticut's fraudulent concealment statute, is applicable to toll the statute of limitations. As for the first element of fraudulent concealment, the plaintiff must present evidence that there exists a question of fact as to whether the defendants had actual knowledge of the plaintiff's cause of action. It is not enough to show that the defendants should have known that there was a cause of action. See Depretis v. Lynch, Superior Court, judicial district of Litchfield, Docket No. CV 09 5005914 (November 18, 2010, Pickard, J.) (declining to find fraudulent concealment when there was no evidence to show the defendant was aware of a plaintiff's cause of action, and such awareness could not be inferred simply because the defendant was an attorney who should know when a cause of action arises). While evidence was submitted that the defendants knew about the change in status, as both the defendants' and the plaintiff's affidavits attest that the tax returns for tax years 2003, 2004 and 2005 were prepared with a change in the plaintiff's status, there is no evidence that the defendants had actual knowledge that this change in status was incorrect, that the plaintiff overpaid his taxes or suffered any injury, or that the plaintiff had a cause of action.
As to the third prong of fraudulent concealment, the plaintiff must show that "[t]he defendants' actions must have been directed to the very Point of obtaining the delay [in filing the action] of which [they] afterward [seek] to take advantage by pleading the statute." (Internal quotation marks omitted.) Bound Brook Association v. Norwalk, 198 Conn. 660, 666, 504 A.2d 1047 (1986). The plaintiff attests in his affidavit that the defendants never disclosed to him any change in his tax status, but he fails to provide any facts to support an inference that the defendants kept this information from the plaintiff because they intended to delay the plaintiff from filing an action. Evidence of even a misrepresentation to the plaintiff by the defendants would not be sufficient to raise a genuine issue of material fact without evidence of the defendants' intention to delay commencement of a suit. See Dinerstein v. Transport Moving Storage, Inc., Superior Court, judicial district of Litchfield, Docket No. CV 06 5004561 (July 9, 2009, Ginocchio, J.) ("Similarly, the evidence of the defendant's alleged misrepresentation of the condition of storage facilities cannot by itself raise a genuine issue of material fact that the misrepresentation was intended to delay a lawsuit.").
With respect to the second element of fraudulent concealment, our appellate courts "[have] not yet decided whether affirmative acts of concealment are always necessary to satisfy the requirements of § 52-595." Falls Church Group, Ltd. v. Tyler, Cooper, Alcorn, LLP, supra, 281 Conn. 107. The Connecticut Supreme Court has recognized that federal case law exists "suggesting that although fraudulent concealment generally requires an affirmative act of concealment, nondisclosure is sufficient when the defendant has a fiduciary duty to disclose material facts." (Citation omitted.) Id.; see also Byrne v. Burke, Superior Court, complex litigation docket at Hartford, Docket No. X03 CV 06 5009290 (September 4, 2007, Langenbach, J.) (explaining that nondisclosure may be sufficient for the proof of the second element of fraudulent concealment when the defendant has a fiduciary duty to disclose material facts, but finding that the plaintiff did not present any evidence to establish that the parties had a fiduciary relationship), aff'd, 112 Conn.App. 262, 962 A.2d 825, cert. denied, 290 Conn. 923, 966 A.2d 235 (2009).
"[A] fiduciary or confidential relationship is characterized by a unique degree of trust and confidence between the parties, one of whom has superior knowledge, skill or expertise and is under a duty to represent the interests of the other . . . The superior position of the fiduciary or dominant party affords him great opportunity for abuse of the confidence reposed in him . . . We have not, however, defined that relationship in precise detail and in such a manner as to exclude new situations, choosing instead to leave the bars down for situations in which there is a justifiable trust confided on one side and a resulting superiority and influence on the other." (Citation omitted; internal quotation marks omitted.) Falls Church Group, Ltd. v. Tyler, Cooper Alcorn, LLP, supra, 281 Conn. 108.
Taken in a light most favorable to the plaintiff, the plaintiff has met his burden with respect to the requirements of the second element of the fraudulent concealment statute. The plaintiff attests in his affidavit that he relied on the defendants as tax experts with their superior knowledge and skill when compared to his own knowledge in tax matters. He also affirms that he trusted the defendants to prepare his taxes for him for seventeen years from 1989 to 2006. Walsh attests that, in his expert opinion, the defendants owed a fiduciary duty to the plaintiff, and he further states that a change in the plaintiff's tax status was a material fact that should have been disclosed. The plaintiff has submitted sufficient evidence to establish that the defendants had a fiduciary relationship with the plaintiff and their failure to disclose his changed status on the tax returns was a breach of their duty to disclose material facts to the plaintiff.
Evidence establishing a defendant's failure to disclose information or a misrepresentation to the plaintiff alone is not enough, however, to create a genuine issue of material fact as to whether § 52-595 tolls the statute of limitations. See Connell v. Colwell, supra, 214 Conn. 251 (finding that the plaintiff could not establish a genuine issue of material fact when the plaintiff presented evidence of a misrepresentation but did not present any evidence to create an inference that the misrepresentation was made for the purpose of delaying the plaintiff's suit). As explained previously, the plaintiff failed to present any evidence to support the first and third elements of fraudulent concealment under § 52-595. The plaintiff has therefore not established the basic factual predicate for the application of § 52-595 and has not met his burden. Accordingly, the defendant's motion for summary judgment is granted.